Bavaria Boom Aids Merkel Re-Election Bid as CSU Ally Revives

July 18 (Bloomberg) -- German Chancellor Angela Merkel’s
re-election bid is getting a lift in Bavaria, powered by the
southern state’s booming economy and a rebound by her allies who
have ruled the region for decades.

Merkel today made her second visit to the state in nine
days to address Christian Social Union members, as polls suggest
her regional sister party will regain an absolute majority in
Bavarian elections on Sept. 15. That would enable the CSU to
govern in the state capital Munich without a coalition partner
as it did from 1962 until the last election in 2008, when it won
with the worst result in more than 50 years.

Having turned from a liability into an asset as a result of
its stewardship of the state’s 465 billion-euro ($610 billion)
economy, the CSU’s resurgence is good news for the chancellor as
she contests federal elections seven days after Bavaria’s vote.
The party’s popularity in Germany’s second most-populous state
has the potential to clinch a third term for Merkel on Sept. 22.

Merkel’s victory “depends on a good result in Bavaria,”
Peter Matuschek, chief political analyst at pollster Forsa in
Berlin, said by phone. “Right now, it looks like the CSU will
contribute a significant share to the federal vote.”

With 12.5 million inhabitants, the state that’s home to
engineering giant Siemens AG and luxury carmaker Bayerische
Motoren Werke AG has more voters than any of Germany’s 16
regions except North Rhine-Westphalia. Merkel is keen to tap
into that wellspring of potential support to fend off a
challenge by the Social Democrats, the biggest opposition party.

Campaign Rallies

“A successful Bavaria is one of the things we need,” the
chancellor said today at the CSU rally in Aschaffenburg, a city
south of Frankfurt just inside Bavaria. Her visit followed a
meeting this month with CSU grandees at Kloster Banz, an 11th-century former abbey, to promote unity within the bloc
comprising her Christian Democratic Union and the CSU that’s
governed Germany since 2005.

The Social Democrats led nationally by Peer Steinbrueck are
wooing Bavarians too, recognizing that the regional elections
one week before the federal vote make Bavarians this year’s
bellwether voters. The SPD held its national convention in the
Bavarian city of Augsburg in April, and Steinbrueck is taking
reporters on a hike in the state in August.

Latest Polls

CSU support was 47 percent in an Infratest dimap poll for
Bayerischer Rundfunk radio released yesterday, an increase on
the 43.4 percent it took in 2008 and close to the scores
garnered before it ceded almost 50 years of single-party rule.
The Social Democrats had 18 percent compared with 18.6 percent
at the last election. Infratest polled 1,004 voters on July 11-15. The margin of error was as much as 3.1 percentage points.

“We’re profiting mutually from the strength of the other:
the chancellor from the CSU and the CSU from the chancellor,”
Stefan Mueller, the CSU’s whip in the federal parliament, said
in a written reply to e-mailed questions. “Only with a strong
CSU will we have a chancellor called Angela Merkel.”

Last September, Merkel visited an annual CSU rally in the
town of Abensberg for the first time in 10 years, addressing the
crowd from a lectern with a hops motif and listening to a polka
band cover the Rolling Stones’ “Angie.”

Now Merkel, 59, the Lutheran pastor’s daughter whose
electoral district is at the Baltic seaside, is reaching out
more regularly to the predominantly Roman Catholic region at the
other end of Germany that promotes beer, lederhosen, luxury cars
and Bayern Munich, Europe’s reigning club soccer champion, as
global trademarks.

‘Teamed Up’

While some Bavarian leaders dissented last year from
Merkel’s goal of keeping Greece in the euro, the sister parties
ultimately “teamed up on all solutions” for ending Europe’s
debt crisis, the chancellor said July 9 at Kloster Banz.

Merkel is Germany’s most popular politician after shielding
Europe’s biggest economy from the worst of the debt crisis,
while Bavaria’s manufacturing industries have benefited from the
euro.

Bavarian unemployment rose slightly in June to 3.6 percent,
the lowest in Germany, compared with a national average of 6.6
percent and 10.8 percent in Merkel’s home state of Mecklenburg-Western Pomerania.

Bavaria’s gross domestic product last year was bigger than
the output of Poland or neighboring Austria. Some 750,000 cars
made in Bavaria by BMW and Audi AG were sold in Europe in the
first half of 2013. While the European car market suffers, both
companies are targeting record car sales globally this year.

BMW Surge

Munich-based BMW’s share price is about 112 percent higher
now than at the time of the 2009 federal election, compared with
a 48 rise in the benchmark DAX Index. Seven of the 30 DAX
members are based in Bavaria.

Bavaria’s performance shields the CSU from voter wrath as
opposition parties fail to capitalize on a scandal over
political patronage in awarding state jobs. In 2008, the CSU had
to bail out Bayerische Landesbank with 10 billion euros in
capital from the state of Bavaria.

Voters now associate the CSU with “achievement and the
economic data,” Heinrich Oberreuter, a political scientist at
Passau University, said by phone. “If the Bavarian votes for
the CSU come in as positively as we’re seeing, that’s half the
victory for Angela Merkel.”

CSU head and Bavarian premier Horst Seehofer, a trucker’s
son who has served as federal health minister and farm minister,
says Merkel’s Bavarian itinerary is mutually advantageous.

“In my entire political career I’ve never been as happy as
in these weeks,” Seehofer said earlier this month alongside the
chancellor at the abbey conclave. Merkel’s presence in the state
is of a “frequency never seen before,” he said. “It will be
fun going to the electorate.”